Democrats Appear Poised to Delay Tax Debate until Lame-Duck

Senate Democrats appear poised to punt a vote on extending the Bush tax cuts until after the November elections. A final decision is expected after a Democratic caucus meeting this afternoon.

Only nine days ago Senate Majority Leader Harry Reid had told reporters that the Senate would vote before lawmakers head home at the end of this month for a last-minute campaign push, but that now looks extremely unlikely.

“I don’t know if it’s possible timing-wise now,” said Sen. John Kerry, D-Mass., told reporters before the meeting. “Given the amount of time that we have and where the votes are I’m not sure we can get it completed because the Republicans will filibuster one thing and you won’t have enough votes for the other, so you wind up not getting 60 votes. And where does that leave you?”

But it’s not merely a timing issue – it’s also a political one. Some Democrats prefer to delay the vote until the lame-duck session because Republicans have already started to accuse them of trying to raise taxes in the middle of a recession.

Democrats in the White House and Congress want to extend the tax cuts only for individuals making under $200,000 and couples making under $250,000, while the wealthiest Americans would see their taxes go up. The Bush tax cuts are set to expire on January 1.

“I think both parties like the politics of it and are scared of the politics of it,” said Sen. Mark Pryor, D-Ark.. “My view is that this should not be a political issue. This has implications for our economy and our recovery and we don’t need to play politics with this.”

In addition to facing opposition from members of his own party who are embroiled in re-election battles, Reid also faces dissent from at least five Senate Democrats who agree with Republican plans to extend all the tax cuts – even for the wealthy – for at least a year or two as the economy recovers.

One of those Democrats – Senate Budget Committee chairman Kent Conrad, D-ND – told reporters that Senate action on the tax cuts can wait until later this year.

“It’s not imperative in the sense that anybody’s tax rate is going to change,” said Conrad.

Now, instead of having the tax fight, the Senate appears set to spend its remaining days on Capitol Hill focusing on a handful of other issues: a campaign finance reform bill that seems doomed to failure, a jobs bill that would reduce taxes for companies that hire new workers to replace overseas employees, a must-pass stop-gap funding bill to keep the government running beyond September 30, and possibly a food safety bill that’s been stuck for 15 months.